Local Government Secretary Eric Pickles is offering “home rule for Birmingham” if people choose an elected mayor to run the city.

Mr Pickles said the city council would be able to break free from Government control and enjoy a substantial increase in its powers and funding if a referendum produced a vote in favour of a London-style mayor for Britain’s largest local authority. Speaking at a Conservative conference fringe event in Birmingham, Mr Pickles said the Government would offer unprecedented financial powers to a mayor who would not be free to make quick spendikng decisions and would not be bound by Whitehall red tape.

He added: “If Birmingham decides it wants a directly elected mayor, we will be offering some considerable financial powers and indpendence.

“If Birmingham does decide to do this, it will mean virtual home rule.”

Although specific details are likely to be outlined by Mr Pickles in a Localism Bill later this year, he told a meeting organised by Birmingham Chamber of Commerce that a Birmingham Mayor would be a “very powerful person”.

The Government is encouraging the country’s largest cities to move to mayors, who are elected once every five years and have powers to hire and fire the council cabinet withiout seeking approval from other councillors.

But the idea is opposed by all of the political groups on Birmingham City Council.

Tory council leader Mike Whitby fears a mayor would mean placing too much power in the hands of one individual.

Mr Pickles has promised that cities like Birmingham will have to ask people whether they want a mayor in a referendum, which could be held as early as next May.

But he is refusing to comment on speculation that the poll might be held after a mayor is in place.

He said: “We will be making an announcement reasonably soon, but it will be up to the people of Birmingham whether or not they want a mayor. The people will definitely have their say.”